Maybe Volvo still does and it's a mystery why they can still sell here. Maybe Volvo doesn't and there is no story here.
But if the car talks to China and gets updates from China, the US doesn't care if it's built here.
The onus is on the commentator to substantiate his claims of there being a rationale.
Software these days is distributed and globalized in virtually every sense. Polestar is headquartered in Sweden and much of their software development is in the UK.
The devs, in the UK or not, will do what it tells them to do.
The battery, engine and everything else is absolutely Chinese made. I don’t know how much assembly there is honestly but i feel the Geely, err i mean Polestar was a little close to that line.
I will say the laws around this indicate just how ridiculous tariffs can be. There’s always some line to press up against and honestly if electric motors, batteries, car bodies and wheels from china have different tariffs to a car as a whole it’s always going to lead to china shipping those parts in an easy to bolt together way to ‘make a car’.
"Ford imported all of its first-generation Ford Transit Connect models as "passenger vehicles" by including rear windows, rear seats, and rear seat belts.[1] The vehicles were exported from Turkey on ships owned by Wallenius Wilhelmsen Logistics (WWL), arrived in Baltimore, and were converted back into light trucks at WWL's Vehicle Services Americas, Inc. facility by replacing rear windows with metal panels and removing the rear seats and seat belts.[1] The removed parts were not shipped back to Turkey for reuse, but shredded and recycled in Ohio.[1] The process exploited the loophole in the customs definition of a light truck; as cargo does not need seats with seat belts or rear windows, presence of those items automatically qualified the vehicle as a "passenger vehicle" and exempted the vehicle from "light truck" status. The process cost Ford hundreds of dollars per van, but saved thousands in taxes.[1]"
The Volvo distinction is ... I mean maybe the Volvo software stack is in Europe or the US. Maybe it's also in China!
I do not really subscribe to this philosophy but what's going on isn't a "Polestar would be tar riffed" thing. It's an outright "you can't sell em" thing
It's a perfectly valid concern, obviously. However in the current context of a blatantly corrupted government this might be a squeeze for money or just something done out of spite.
Unfortunately, this doesn't seem to be that.
There's a whole industry around reverse engineering tariff classifications to find ways to minimize all-in manufacturing cost.
For example, let's say you sell air purifiers.
Option 1 is to import an air purifier and pay the 25% tariff (or whatever the actual duty rate is) on air purifiers.
Option 2 is to import a widget that gets classified as a fan (with 5% duty) and import a widget that gets classified as an air filter (with 10% duty), then put them in the same box somewhere in the US.
Both are sold to consumers as an air purifier. But one of the options minimizes total cost to the manufacturer.
"Dolls," which represent human beings, are taxed at almost twice the rate of "toys," which represent something not human - such as robots, monsters, or demons. As soon as they read that, Sherry and Indie saw dollar signs. it just so happened that one of their clients, Marvel Comics, was importing its action figures as dolls. And one set of action figures really piqued Sherry and Indie's interest: The XMEN, normal humans who, at around puberty, start to change in ways that give them strange powers.
So Sherry and Indie went down to the customs office with a bag of XMEN action figures to convince the US government that these mutants are NOT human. That argument eventually became a court case that went on for years.
But politicians can never resist exceptions and carve outs and then the game starts again
Isn't that just going to further advantage multinational corporations that don't have to move currency in order to move resources because they're all within the same corporation?
In 1999 Swedish Volvo spins out and sells Volvo Cars to Ford (Volvo Sweden continues making trucks and heavy equipment) for 6.45 B USD.
In 2010 Ford sells Volvo Cars to Geely for 1.8 B USD.
iN 2017 Geely spins out Polestar from Volvo Cars. In 2021 Geely IPOes Polestar at NYSE for 20 B USD.
Leonardo DiCaprio-Backed Electric Automaker Polestar Valued At $20 Billion In SPAC Deal
https://deadline.com/2021/09/leonardo-dicaprio-backed-electr...
Polestar, the electric vehicle company backed by Volvo of Sweden and Leonardo DiCaprio was valued at $20 billion in a SPAC deal that will take it public.
Feds deny Polestar authorization to sell cars in US from model year 2027
But Geely can throw down the gauntlet by building Polestars and relabeling them Volvos.
It's all just this lawless personal fealty shit.
Are the people who don't like it going to withdraw those powers the next time they have the opportunity? The main alternative is more of this.
But what annoys me the most about the article is this constant praise of „China Speed“, Cost-Advantages and Love of the Free Market, as if not every single Chinese Automaker, including its Suppliers down to the tiniest screw is a State owned entity, massively subsidized and in general part of a rigged market.
This is not to take from the accomplishments of the Chinese, but a major part of the last 30+ years of development is just massive screwing and exploiting the western open market and its companies. Yeah, we’ve not forgotten the droves of people blatantly stealing IP on every trade show imaginable and a state completely absent from enforcing IP when ever another Chinese car is dropped to the market that looks 100% like a Benz, Porsche or Land Rover.
First, a "subsidy" is just govt tax money. In other words it comes from somewhere. It is, in effect, the Chinese people, contributing to the creation, or development of an industry. Clearly the Chinese govt thinks this is a sound commercial strategy, and certainly from here (considering their global dominance in manufacturing) it appears to be working.
Secondly, it's not like all countries don't subsidize industries of their own. Although their decisions of what to subsidy varys a lot.
For example the US subsidizes weapons production. To the tune of a trillion $ a year. That spills over a bit into commercial stuff (Boeing for example.) And sure, there is some export value (although that may decline in the long term given current political isolationism.)
Of course you can't spend a trillion a year if the storehouse is full. It's necessary to expend some munitions from time to time to make room for new ones. But I digress.
To go back, when people complain that US products are expensive because of Chinese (or other) subsidies- just be aware that the US subsidizes more than most. They just target industries that have little to no economic value to US citizens, and which can't be purchased by domestic or indeed foreign citizens.
The US could easily subsidize electric cars, or solar, or wind manufacturing but it chooses to subsidize airplanes and naval ships and tank builders instead. It chooses to spend money on 2 million employees (armed forces) rather than on 2 million factory workers, or day-care facilitators, or health-care workers.
Do you think other countries do not subsidize their own automakers? What about the US government bailing out the entire US auto-industry during the GFC? To this day the French state owns 15% of Renault-Nissan and has given this company many tax breaks for the last 30 years or so just to keep some of the production in France.
It's too easy to dunk on China when the rest of the world has been doing the same exact thing for god knows how long but nobody had a problem with that as long as the EU/US auto-makers were making money hand over fist. Now, that it is changing, all of sudden everyone is screaming that China is the devil when it basically follows the same exact playbook.
As for free market argument, it is arguably harder to compete as a Chinese company in China given the cut-throat competition happening now than in the west and contrary to most of the western governments who would be too scared to let Ford or Renault fail for example, the Chinese government is very happy to see that some of its auto companies are failing because it means that the remaining ones are performing much better and have to keep innovating to succeed.
That is why the Chinese automakers are steamrolling the competition at the moment, they give people what they want: innovative products at a fair price point.
As it's been said many times in the past, don't hate the player, hate the game.
I'm not saying "trust the government", not at all. But meddling in China trade is absolutely not meddling with the free market.
Ideally what you would want is to get China to stop doing that, but now propose a mechanism to get them to.
China subsidizes (among other things) battery manufacturing, which is the biggest single cost for making EVs. If you get your batteries cheaper than competing companies then you can make premium cars with an electric range at the high end of the market and then use the subsidized cost to provide other amenities that cause customers to choose your product over alternatives even at a premium price. It allows you to take the high end of the market on value just as well as the low end on cost.
https://www.mozillafoundation.org/en/privacynotincluded/cate...
Polestar is predominantly Chinese-owned. Federal Connected Car Rules instituted a ban on the company selling cars in the United States.
I don't see any of those on the mozillafoundation page, per @andsoitis.
It is silly to credulously pretend that the excuse about Chinese software has even a whiff of legitimacy.
(Though I thought that anybody as smart as you think you are would've inferred that without issue)
Their cheap exports: sinister pump and dump
Once upon a time nations understood the issues better: https://en.wikipedia.org/wiki/List_of_telephone_switches
This is a massive lie monopolists tell you to justify anti-competitive mergers.
Increasing entity size has economies of scale (amortizing fixed costs over more units) and diseconomies of scale (bureaucratic overhead, long-distance transportation costs, etc.)
Economies of scale peter out with increasing entity size. Amortizing a $1000 fixed cost over 100 units instead of 10 saves $90/unit. Amortizing the same $1000 fixed cost over a trillion units instead of a million saves less than one tenth of one cent per unit.
Diseconomies of scale metastasize with increasing entity size. Entity size exceeds Dunbar number, language barriers and timezone asynchrony, corporate politics, independent jurisdictions imposing mutually-incompatible legal requirements, insufficient competition compromises incentives for efficiency as long-term incumbents succumb to Iron Law of Bureaucracy, etc.
By the time you're operating something at the scale of the entire planet, having the benefits of scale still exceed the costs of scale will happen approximately never.
The history is complicated and a side quest to the conversation here, but a free market did play out in the US and became fever pitched after AT&T was hand tied in the 1980s.
A free market means if you can do something better/cheaper/faster, or at least convince other people of the promise, you have a shot. The more that come (think of a gold rush), the potential returns diminish so it will eventually be hard to either acquire revenue/customers or funding for speculative approaches if they are capital intense.
Also, ironic to the conversation, the "best" machine vis a vis when and what, came out of the monopoly: the 5ESS. The Bell System was a reflection of a different culture and values system than what the US has today post leveraged buyout conglomerates and software company monopolies.
Things with a large R&D expense are exactly like software. They have that specific problem with copying. If one company pays to do R&D and the others copy them, the one doing it can get out-competed because they have higher costs, and then there is a lower incentive to do it.
The problem comes after the government barges into the market and tries to address that problem with its inverse by granting the first company a monopoly. Then you have more incentive to do R&D, but only by trading the market for a czar.
The problem you have isn't that economies of scale couldn't support more manufacturers, it's that now other companies aren't allowed to make the product until the patent expires, and in many industries the incumbent will then use the profits from an existing patent to buy up other companies and patents and perpetuate a monopoly that was supposed to be temporary.
We don't currently solve that problem well, but the problem isn't that some things require too much scale. Markets where each of the patents required for a product are developed by more smaller entities who then license them like a patent pool is one structure that works as an alternative.
The actual problem is that governments are too shy about enforcing antitrust laws in patent cases, in part because it's counterintuitive to grant a monopoly on purpose and then prosecute over it. But the way it's supposed to work isn't that. Antitrust isn't about having a monopoly, it's about abusing one, e.g. leveraging a patent on one technology into a separate monopoly on an ancillary technology by tying the purchase of the patented product the other one. Or uncompetitive mergers, e.g. a company that already has a dominant market position in one market buying or exclusively (rather than non-exclusively) licensing patents that give it control over a different one.
We could definitely mess that up less than we currently do.
> The more that come (think of a gold rush), the potential returns diminish so it will eventually be hard to either acquire revenue/customers or funding for speculative approaches if they are capital intense.
"Nobody goes there anymore, it's too crowded."
If it's hard for new entrants to compete only because there are already so many incumbents, that's fine, because the number of existing suppliers is already large. The problem comes only when there is some artificial barrier to new entrants in a market that doesn't have enough providers as it is.
Government subsidised corn syrup in everything.
> Their cheap exports: sinister pump and dump
Hang on, are you just talking about American on both sides of the pros and cons
Cheap good for decades has meant companies have been able to depress wages to the point no one can really live without them. Removing the cheap goods without also giving up massive corporate profits would just mean most people collapse into poverty.
They just want to ban even more things.
People make stuff like this abroad because wages are too high here to make a profit, not too low.
that means if employers want to pay workers fairly they need to pay a lot more than in other countries with a cheaper economy. but even the inflated wages are not growing fast enough to catch up with cost of living. so yeah wages are too high compared to the rest of the world but also too low relative to the gdp and growth rate and corporate profits.
"Pay workers fairly" isn't something that companies in a competitive market can choose whether to do. If labor costs are high, they can either pay them, move operations to somewhere else, or stop operating. If labor costs are low, paying more than that would cause them to have higher prices than competitors.
What this implies is that countries with e.g. inflated housing costs will see operations to move to other countries whenever that's feasible, and indeed this is what we see. This isn't companies choosing to do this -- different companies will do different things, but then the ones doing the thing that requires them to have higher prices will be out-competed.
You can't fix that by admonishing them to "pay workers fairly", you can only fix it by increasing the domestic supply of housing and energy.
Yet the US government seems happy to play games like this; there must be someone thinking - hey the shoe could soon be on the other foot? Maybe we should cool it a bit ...
Same goes for Thinkpad/Motorola, but I guess there at could argue these are not original Chinese brands.